Top 10 Tips for Buying Your First Home

Since most people aren't going to pay for their house with cash at the closing table, you're probably going to have to take out some type of loan or mortgage. A mortgage is simply a loan that uses a piece of property, like your new home, as collateral, giving the bank the right to take the home if the person taking out the mortgage doesn't hold up his or her end of the bargain [source: The Federal Reserve Board].

Think about your long-term plan when you're exploring your mortgage options. You might be one of those people who never plans to buy another home, so maybe you're more interested in a 30-year, fixed-rate mortgage. However, another couple might look at this home as a starter property that they only want to own until their second child is born. They might want an adjustable rate mortgage.

Shopping around for a mortgage is also a good idea. Different banks may be able to give you different interest rates or different terms. When doing your shopping, be sure that you're comparing apples to apples, so ask about the same types of loans, terms and amounts to get a better understanding of what's really the best deal for you [source: The Federal Reserve Board].